# 1. Financial Performance ## A. Key Figures * Revenue from Operations: INR533.3 Cr Q3 FY'26 (+8.4% YoY) · INR1,557.7 Cr 9M FY'26 (+9.1% YoY) * **Biscuit Segment Revenue:** **INR325 Cr** Q3 FY'26 (+6% YoY) * **Bakery Segment Revenue:** **INR198 Cr** Q3 FY'26 (+13% YoY) * EBITDA: INR68.4 Cr Q3 FY'26 (+11.4% YoY) · INR195.9 Cr 9M FY'26 * EBITDA Margin: **12.9%** Q3 FY'26 (+44 bps YoY) · **12.6%** 9M FY'26 * PAT: INR38.1 Cr Q3 FY'26 (+10.1% YoY) * **Dividend:** **INR0.6** per equity share (interim) ## B. Revenue Growth * **Divergent Segment Trends:** Biscuits and Bakery both posted positive growth, with Bakery outperforming on strong brand-led demand, while Biscuits growth was constrained by GST 0% transition and punitive tariffs. * **Domestic Strength, Export Drag:** Domestic revenue grew in the high-single-digit range, nearing double digits, offsetting low-single-digit export growth impacted by loss of export incentives. * **Incentive Impact Quantified:** Absence of export incentives reduced overall revenue growth by nearly **1 percentage point**, highlighting structural headwinds for exporters. ## C. Profit Margins * **Margin Expansion Despite Headwinds:** Q3 EBITDA margin improved 44 bps, driven by favorable business mix, revenue growth management, and operational efficiencies—not input cost relief. * **Gross Margin Resilience:** Gross margin improved sequentially in Q3 despite losing export incentive benefits present in Q2, signaling underlying pricing and cost discipline. * **Commodity Pressure in Domestic Biscuits:** Sharp rise in palm oil prices from October–November 2024, coupled with intense competition, weighed on profitability in the domestic biscuit business. * **Cautious Margin Outlook:** Management expects only a **marginal improvement** in gross margins in FY'27, pending finalization of the AOP process. ## D. Cash Flow & Dividend * **Shareholder Returns Maintained:** Interim dividend of INR6 per share declared, reflecting continued commitment to returns despite mixed operating conditions. --- # 2. Volume & Pricing Trends ## A. Key Figures * **Domestic Biscuit Growth:** **Low-teens** projected next two quarters · **Double-digit** expected in H2 FY'27 * **Bakery Q3 Growth:** **High teens** (volume-led) * **Export Biscuit Q3 Growth:** **Low-single-digit** (U.S. decline offsetting gains) * **B. S. Export Revenue Mix:** **~20%** of total export revenue ## B. Domestic Demand Recovery * **Recovery Underway:** Domestic demand rebounding post-GST 0 transition, supported by MRP reductions and higher grammages driving volume-value growth. * **Sequential Momentum:** Biscuit and bakery segments show consistent sequential improvement, with distribution expansion near Punjab and Indore amplifying reach. * **Market Pressures:** Growth occurs amid intense competition in North India from national and regional players, requiring sustained brand and distribution investment. * **Outlook Strengthening:** QSR expansion signals improving bakery demand trajectory, reinforcing positive momentum into forward quarters. ## C. Export Pricing Impact * **D. S. Rebound in Value Terms:** Exports normalized over six months with focus shifting to premiumization over volume, despite temporary tailwinds from prior-year low tariffs. * **Near-Term Headwinds:** Q3 export growth constrained by U.S. market softness, though structural opportunity remains strong for India-made mainstream (non-ethnic) biscuits. ## D. GST 0 Consumer Benefits * **Positive Turn in Consumer Response:** GST 0 impact turned favorable sequentially, enabling high-single-digit quarterly growth and validating pricing and pack-size adjustments. --- # 3. Channel & Distribution ## A. Key Figures * **B2B & Export Mix:** **45–47%** of total bakery revenue * **Frozen B2B Revenue:** **~20%** of B2B bakery revenue * **Quick Commerce Share:** **80–85%** share in bun category * **Household Penetration:** **3 lakh+** via Blinkit collaboration * **Export Reach:** **60–70 countries**, with U.S., South America, Europe, U.K. focus ## B. Regional Penetration * **Core Radius Expansion:** Deepening distribution within **400–500 km** of Indore and Punjab plants to drive domestic growth, aligning with a focused two-pronged strategy. * **National Brand Ambition:** English Oven targeting **pan-India presence within two years**, with two new geographies launching in FY26. * **New Market Unlock:** Calcutta region emerging as incremental growth corridor beyond McDonald's footprint. * **Investment Resumption:** Post-margin stabilization, company has restarted strategic investments in distribution, branding, and innovation. ## C. Quick Commerce Share * **Category Leadership:** Dominant **80–85% share in quick-commerce buns** underscores strong positioning in fast-evolving retail channels. * **Platform Momentum:** Early mover advantage since 2022 and sustained investment have yielded **disproportionate quick-commerce share versus general trade**. * **Premiumization Play:** Products like Zero Maida Coconut resonate in quick commerce, supporting premium segment growth. * **Brand Amplification:** Festive collaboration with Blinkit achieved **3 lakh+ household reach** for Danish Butter Cookies, boosting visibility. * **QSR Outlook:** Despite current softness, management expects a **recovery trajectory in QSR demand** ahead. ## D. B2B Customer Expansion * **B2B as Growth Engine:** B2B segment remains a key revenue driver, with strong presence across major QSR chains including Tim Hortons and leading burger brands. * **Frozen Segment Ramp-Up:** Frozen B2B business, developed over 2–3 years, now gaining traction with **robust pipeline set to lift next-year revenues**. * **High Market Share:** Company holds commanding position in QSR bun supply, reinforcing B2B moat. --- # 4. Brand & Product Performance ## A. Key Figures * **English Oven B2C Growth:** **High-teens** quarterly growth * **Diwali Gifting Growth:** **Over 20%** in biscuit segment * **Domestic Cremica Outlook:** Projected **low teens growth** next year ## B. English Oven Growth * **Core Growth Engine:** English Oven remains the primary bakery growth driver, underpinned by brand strength, health positioning, and expanding QSR partnerships. * **Geographic Expansion:** Recent entry into **Kolkata and Hyderabad** bolsters national footprint, with **1–2 additional cities** targeted in the next fiscal. * **Segment Divergence:** Strong B2C momentum offset by softer B2B performance, contributing to sequential moderation in overall bakery growth. * **Strategic Sourcing Shift:** Company is displacing European suppliers in key export markets (e.g., **Danish cookie tins for Walmart**), with no direct competitive threat from China. ## C. Premium Product Launches * **Premiumization Push:** Portfolio expansion over the past 8–9 months includes **premium cookies, sourdough, and health-focused variants**, aimed at differentiation in a crowded market. * **Gifting Momentum:** Diwali season delivered **over 20% growth** in gifting, led by new SKUs like **Golden Bites, Fruit and Nut, and Pista Almond**. * **Brand Investment:** Ongoing brand studies and marketing spend for **Cremica and English Oven** support long-term equity building. ## D. Frozen & Health Portfolio * **Health-Centric Innovation:** Full rollout of **Zero Maida** and **NaturBaked** lines reinforces better-for-you positioning across categories. * **Frozen Expansion:** Ready-to-eat dessert line scaling beyond core snacking, with pilot launches in **NCR retail outlets** expected to stabilize and grow next year. * **Future Growth Levers:** Incremental QSR growth seen from **frozen food categories**, complementing potential recovery in bun demand. --- # 5. Capacity & Manufacturing ## A. Key Figures * **Khopoli Plant Capacity:** **132,000 breads/day** and **1 million buns/day** (buns capacity doubled) * **Asset Turnover Target:** **2 to 5x** expected within **2 to 3 years** post-commissioning * **Segment Growth:** Bakery QSR grew in the **mid-single digits** in Q3 ## B. New Plant Commissioning * **Strategic Regional Expansion:** Commissioning of the **Kolkata plant** and entry into **Hyderabad** mark execution of Eastern and Southern India growth, while **Khopoli plant** nears launch to unlock scale in Maharashtra. * **Capacity Leap:** Khopoli facility enables vertical integration for bread and a **doubling of bun output**, eliminating prior outsourcing and boosting operational flexibility. * **Future Client Access:** New capacity allows onboarding of a **previously inaccessible major customer**, with similar Bangalore expansion planned next fiscal. ## C. Geographic Capacity Expansion * **Export-Focused Infrastructure:** Indore plant is **purpose-built for U.S. market**, reinforcing position as a top supplier of Danish cookie tins, despite short-term underutilization. * **Constraint Relief:** New plants in **Kolkata, Khopoli, and future Bangalore** will alleviate chronic capacity bottlenecks in West and South, enabling deeper market penetration. ## D. Production Optimization * **Phased Ramp-Up:** Khopoli plant designed for long-term scale, with full asset turnover optimization expected over **2–3 years** as production volumes ramp. --- # 6. Input Cost & Trade Risks ## A. Key Figures * **Export Duty Impact:** Margins would have reached **14%** absent incentive suspension * **Tariff Reduction:** Rate cut from **50% to 18%** for exports to EU and U.S. ## B. Export Incentive Suspension * **Temporary Policy Shock:** Export incentives paused since August, creating a near-term margin headwind, but viewed as a **short-term fluctuation** with recovery expected. * **Mitigation Strategy:** Company plans to **offset impact via import optimization** despite six months of foregone benefits. ## C. U.S. Tariff Uncertainty * **Cautious Recovery Post-Tariff:** Business remains below pre-tariff levels; **new U.S. projects paused but set to resume**, with **renewed client engagement** following trade deal progress. * **Deal-Driven Momentum:** U.S.-India trade agreement advances India’s role as a **global sourcing hub**, boosting confidence and supporting **retention of key contracts** (e.g., Danish cookie tins). * **Pending Clarity:** Tariff rates under the agreement remain uncertain—**18% under discussion, potential for 0% on select items**, with resolution expected by **end-March**. ## D. Raw Material Hedging * **No Near-Term Cost Relief:** **Hedging commitments through March** prevented realization of lower raw material prices in Q3. * **Product Capability Gains:** Upgraded offerings in **distinctive biscuit categories** strengthen international competitiveness despite input cost constraints. --- # 7. Guidance & Outlook ## A. Key Figures * **Revenue Growth Target:** **mid-teens** for FY '27 (domestic & group) · **low teens** for bakery B2B · **low-double-digit** for export biscuits * **Margin Target:** **14% range** expected in H1 FY '27, with upside from Q4 onward ## B. Revenue Growth Forecast * **Export-Led Acceleration:** Revenue growth set to reaccelerate from Q1 FY '27, driven by resolution of tariff uncertainties and new trade deals with the U.S., U.K., and Europe. * **Domestic Momentum:** RGM initiatives and distribution expansion now in execution mode, supporting **differentiated product launches** and volume growth in biscuits. * **Sequential Improvement:** Growth trajectory shows clear inflection, with low-teens expansion expected in FY '27 underpinned by strategic investments and capacity ramp-up. ## C. Margin Recovery Plan * **Margin Rebound in Sight:** Target of 14% EBITDA margin range in H1 FY '27 reflects operating leverage and easing trade headwinds, with further upside expected from Q4. ## D. FY27 Strategic Priorities * **Global Expansion Focus:** U.S., U.K., and South America identified as key growth markets, with U.K. poised for strong performance post-tariff clarity. * **Execution on Trade & Capacity:** Export resurgence backed by concluded EU FDA process, new Q1 trade deal, and enhanced production capabilities in Indore and other facilities.